NetLogic Microsystems Announces Record Second Quarter 2008 Financial Results

– Q2 FY 2008 Non-GAAP Net Income: $9.2 million; $0.40 per share (diluted)

NetLogic Microsystems, Inc. (NASDAQ: NETL), the leader in the design and development of knowledge-based processors and high-speed integrated circuits, today announced financial results for its second quarter ended June 30, 2008.

Revenue for the second quarter of 2008 was $36.5 million, a 6.9 percent sequential increase from $34.2 million for the first quarter of 2008 and a 41.4 percent increase from $25.8 million for the second quarter of 2007.

Second quarter 2008 net income, determined in accordance with generally accepted accounting principles (GAAP), was $2.3 million or $0.10 per diluted share. By comparison, GAAP net income was $1.1 million or $0.05 per diluted share for the first quarter of 2008. GAAP net income included stock-based compensation expense, the amortization of intangible assets, and a fair value inventory adjustment. Excluding these items, non-GAAP net income for the second quarter of 2008 was $9.2 million or $0.40 per diluted share, compared with $0.38 per diluted share for the first quarter of 2008.

Management Qualitative Comments

“This is an exciting time for us,” said Ron Jankov, president and CEO. “We see near-term and long-term product cycles driving our record revenues and record levels of design wins and activity. Enterprise and Carrier networks are continuing to heavily invest in the development and deployment of next-generation, intelligent IP-based networks, which often incorporate our knowledge-based processors and advanced physical layer solutions as fundamental elements of their design. Our nearly flawless engineering execution and industry-leading product portfolio has allowed us to win a significant number of key designs at the top communications equipment companies around the world. We believe that we are well positioned to be able to deliver solid long-term revenue and profit growth as these designs continue to ramp into volume production over the next several years.”

Recent Highlights
NetLogic Microsystems announced production shipment of the NL91024 processor, the second member of its fifth-generation “hybrid” knowledge-based processor family. The NL91024 device integrates 128 high-performance knowledge-based processing engines, which is double that of the previously announced NL9512 device. In addition, the NL91024 processor features an enhanced Intelligent Load Balancing Engine (ILBE) to efficiently allocate multiple tasks and communicate among all the 128 knowledge-based processing engines. The knowledge-based processing engines and ILBE are tightly coupled with the Company’s advanced Sahasra™ Algorithmic Engines to dramatically lower the power consumption of search processing in the NL91024 “hybrid” knowledge-based processor.
The company’s NL7000 family of knowledge-based processors were selected by ALAXALA Networks for ALAXALA’s high-end AX7800 router and switch that will be shipped into leading carriers in Japan and South Korea for the migration to next-generation networks (NGN).
NetLogic Microsystems also announced the new NLP2040 and NLP3040 PHY devices, the industry’s first quad-port 10 Gigabit Ethernet (10GbE) physical layer (PHY) devices that deliver the highest performance and lowest power consumption for next-generation switches, routers and blade servers addressing the data center, enterprise networking, storage and service provider markets.
The company was named to FORTUNE Small Business magazine’s eighth annual list of the 100 fastest growing public companies in America. NetLogic Microsystems was one of only three semiconductor companies that received the honor.
Following the announcement of the availability and successful customer design win momentum of the NLS205 family of NETL7™ knowledge-based processors in April, NetLogic Microsystems achieved first pass silicon success during the second quarter and began sampling its single chip Layer 7 solutions. Customer feedback has been very positive and the company expects to work with its customers to bring these initial designs to production early next year. The NLS205 family is the industry’s first single-chip content processing solution that is capable of scaling from 250 Megabits per second (Mbps) to 2.5 Gigabits per second (Gbps) line-rate performance without requiring external memory. The NLS205 family of processors is targeted at high-volume applications such as security and networking systems for small and medium-sized businesses and datacenter servers.

Conference Call

NetLogic Microsystems will hold its second quarter 2008 financial results conference call today at 2:00 p.m. Pacific time. To listen to the conference call, dial 800.659.1966 ten minutes prior to the start of the call, using the passcode 71282554. International callers, dial 617.614.2711. A taped replay will be made available approximately two hours after the conclusion of the call and will remain available for one week. To access the replay, dial 888.286.8010 and enter passcode 68760434. International callers dial 617.801.6888.

The conference call will be available via a live webcast on the investor relations section of NetLogic Microsystems’ web site at http://www.netlogicmicro.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for three months.

About NetLogic Microsystems

NetLogic Microsystems, Inc. (NASDAQ: NETL), a fabless semiconductor company headquartered in Mountain View, California, designs, develops and markets high-performance knowledge-based processors and high-speed integrated circuits that accelerate the delivery of voice, video, data and multimedia content for advanced enterprise, datacenter, communications and mobile wireless networks. NetLogic Microsystems’ products include high-performance knowledge-based processors, application-aware content processors, 10-Gigabit Ethernet interconnects and network search engines that are being deployed by Tier 1 original equipment manufacturers (OEMs) in leading systems such as routers, switches, wireless infrastructure equipment, network security appliances, datacenter servers, network access equipment and network storage devices. NetLogic Microsystems’ knowledge-based processors and content processors employ an advanced processor architecture and a large knowledge or signature database containing information on the network, as well as applications and content that run on the network, to make complex decisions about individual packets of information traveling through the network. NetLogic Microsystems’ products significantly enhance the performance and functionality of next-generation networks that are designed to deliver high-definition video delivery over the Internet (IPTV), media-rich content over advanced mobile wireless services, voice transmission over the Internet (VoIP) and network security applications. For more information about products offered by NetLogic Microsystems, call +1-650-961-6676 or visit the NetLogic Microsystems Web site at http://www.netlogicmicro.com.